To Prepare Demand Forecasts, Should We Listen to Our Customers?

Mohammad Ali

Research output: Other contributionpeer-review


If the answer to this question appears to be obvious, please read on! There’s been lots of discussion about how forecasting is done, but much less about what is forecasted. Now, this is an important issue for all forecasters, but none more so than Supply Chain forecasters. Let’s suppose you’re using a particular forecasting method and there’s no scope to change it in the short-term. What can you do to improve forecast accuracy?

As a manufacturer or wholesaler, if you are blindly following your customer’s orders to plan your inventory then you are a victim of the Bullwhip Effect. This is according to the ground breaking research by Hau Lee and his colleagues at Stanford University. The Bullwhip Effect is a demand amplification phenomenon which shows that the more far you are from the actual consumer, the more inventory and/or stock-outs you will experience.
Original languageEnglish
Number of pages1
Publication statusPublished - 2010


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